Cabinet note on Credit Guarantee Scheme in 7-10 days: FM

New Delhi: The Finance Ministry will move a Cabinet note in 7-10 days to launch Credit Guarantee Scheme proposed in the Budget to ensure better flow of education loans to deserving students.

"The Cabinet paper will go to the Cabinet within the next 7 or 10 days and then the Credit Guarantee Scheme will also be launched.

"This will give great comfort to the banks and we hope that the bank lending to the education loan segment will improve significantly once the Credit Guarantee Scheme is also in the place," Finance Minister P Chidambaram said.

He was talking to reporters after meeting heads of public sector banks and financial institutions.

A scheme of interest subvention is already being implemented for the education loan segment.

As on September 30, 2012 there were 24.63 education loan accounts with Rs 52,480 crore outstanding.

"Education loans is a success story. It continues to be success story...," Chidambaram said.

In the last fiscal, the public sector banks had disbursed Rs 49,069 crore.

On lending to minorities, Chidambaram said banks will meet the target given to them this year.

"This year as end of June we have already reached 14.87% (of priority sector lending) and we are totally confident that by the end of the (financial) year it will cross 15%," he said.

Last year the banks loans to minorities stood at 14.55% of their priority sector lending.

In June 2007, the government had advised the public sector banks to step up their minority community lending to 15% of their priority sector lending.